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Estimated Income Tax Savings and “After-Tax” Payment
Important Note: This example estimates the annual tax savings
(including property tax and mortgage interest). It is important to
inform your clients to consult a tax advisor for an accurate income
tax deduction computation for their particular tax situation.
Buyers in a 28% income tax bracket are looking to finance a $150,000
mortgage for 30 years at 8% annual interest. If they will be paying
approximately $1,500 in annual property taxes and $250 in annual
property insurance, find their estimated annual tax savings (or mort-
gage interest/property tax savings) and “after-tax” monthly payment.
STEPS
KEYSTROKES
DISPLAY
Clear calculator
o o
0.00
Enter Term in years
3 0 T
30.00
Enter annual Interest rate
8 ˆ
8.00
Enter annual property tax
1 5 0 0 s 7
1,500.00
Enter annual property ins.
2 5 0 s 8
250.00
Enter Loan Amount
1 5 0 ) l
150,000.00
Find monthly P&I Payment
p
“run” 1,100.65
Find monthly PITI Payment
p
1,246.48
Enter tax bracket
2 8 s p
*
“run” 28.00
Find annual income
tax savings
p
3,767.32
Find monthly tax savings
p
313.94
Find “after-tax” Payment
p
932.54
*For desktop model, press
†
key to perform this function.
— DO NOT CLEAR CALCULATOR —
If the above loan starts in July, find the “after-tax” payment.
STEPS
KEYSTROKES
DISPLAY
Set Month Offset to July
7 s )
7.00
Enter tax bracket
2 8 s p
*
28.00
Find annual tax savings
p
1,887.16
Find monthly tax savings
p
314.53
Find “after-tax” Payment
p
931.95
Return Month Offset to
January
1 s )
1.00
*For desktop model, press
†
key to perform this function.
